Improve Government’s Capacity to Enforce Environmental Laws and Regulations . 29

Many of the kinds of pollution and natural resource issues facing China today were experienced in Japan, the United States, and Europe in earlier decades and some of the same problems remain today. The significant improvement in the control of environmental pollution over the past half century and the current focus on environmentally friendly enterprise among OECD nations is the result of public awareness and expectations, scientific advancement, societal learning, and strong governmental leadership in moving societies in this direction. In Japan and the West, substantial capacity now exists in the internal management of environmental agencies.

Many steps have been taken to assure systematic monitoring, oversight, enforcement, and continuous scientific data collection and analysis. As a result, substantial improvements have been made in energy and resource efficiency levels and pollution control. These changes have not been achieved easily or always in the most efficient manner, yet they have been accomplished without undermining the economic growth and the quality of life enjoyed by the affected populations. In fact, these changes were necessary to protect the health of citizens and to reverse dangerous levels of resource degradation. Indeed, these changes have in many cases done much to improve quality of life and even the economic performance of firms.

Improving environmental governance in the European Union, Japan, and the United States has required the adoption of stringent environmental protection legislation, substantial policy experimentation and learning, development of the administrative and managerial capacity within governments and businesses to carry out the provisions of environmental laws, the allocation of substantial public and private resources, and unrelenting pressure from the general public and involvement of the NGO community. In every instance of sustained environmental improvement it has required the expectation in the society that there will be strong enforcement of environmental policy and leadership from the nation’s top government officials and central environmental agencies (see Gade & Faur: “The United States Environmental Policy System – An Evolution in Federal vs. Local Control”, Occasional Paper).

China has made enormous strides in this regard since the establishment of the Lead Group of Environmental Protection under the State Council in 1974 and the National Environmental Protection Agency (NEPA) in 1984. The elevation of NEPA to the State

Environmental Protection Administration in 1998 was a particularly important development. And while SEPA only has a few hundred officials working directly for it, there are also thousands of village, county, municipal, and provincial level EPBs to assess, monitor, and protect the environment and natural resources of the nation.

Nonetheless, as indicated by the TF’s case studies and in the numerous academic and research reports by Chinese and international scholars, the pace of economic, industrial, and urban development in China and the resultant environmental degradation to water, air, land and human health, has outpaced the ability of SEPA and the EPBs to provide the level of environmental protection intended in the nation’s laws and expected by the leaders and the people of China.

It is the opinion of the TF that this imbalance needs to be redressed as the single most important step in improving the environment, health, and quality of life in China, while the nation continues to develop economically. The situation calls for significantly enhancing the capacity and role of SEPA and its counterpart EPBs to ensure the successful realization of the ambitious environmental goals of the law and of the 11^th Five Year plan; goals and laws cogently summarized and restated in the State Council’s recently published “White Paper on Environmental Protection in China, 1996-2005”.

To create the needed administrative and managerial capacity within the government commensurate with the multi-faceted challenges of environmental protection in China, the TF recommends the following actions be taken by the central government.

a. Elevating SEPA

SEPA lacks the stature and power of other government ministries. It does not have capacity commensurate with its responsibility to implement the law and protect the environment. A major step in remedying this situation is to elevate SEPA to cabinet rank.

The experience in nations as diverse as Japan, Germany, and the United States all substantiate the need to elevate a nation’s environmental agency to the highest level of government in order to imbue it with the power, prestige, and visibility necessary to serve as a counter-weight to the competing forces in the government, and in society.

In 1971, the Netherlands added environmental protection to the responsibilities of the Ministry of Public Health and Environment; in 1982, environmental protection was

moved to the Ministry of Housing, Spatial Planning and the Environment. In the wake of the Chernobyl nuclear accident and rising concerns about acid rain and stratospheric ozone depletion, in 1986, the German federal government combined the environmental responsibilities that had been held by three separate ministries (interior, agriculture, and health) into the Federal Ministry for Environment, Nature Conservation, and Nuclear Safety. When in 2001 the Japanese government restructured its government and cut the number of ministries in half, it created only one new ministry: the Environment Ministry. The United States has not created a Department of the Environment, but the Environmental Protection Agency’s Administrator is accorded Cabinet rank and reports directly to the President. Providing SEPA with this level of standing within the government is important in light of the expectation that development and resource consumption in China must be harmonized with environmental protection and resource conservation in order to ensure a more sustainable society. Elevating SEPA will also provide it greater access and accountability to the nation’s senior political leadership.

Action item (1): Elevate SEPA to full cabinet rank in the government.

b. Streamlining EPBs and Aligning them with SEPA

Coordinating and aligning the disparate interests at the local, regional, and national level of society around environmental policy objectives and the management of natural resources has been one of the more difficult challenges faced by every OECD nation that has developed the capacity to oversee management of its resources and addressed the serious problems of pollution that accompanied industrialization. The experiences of the nations of the EU, Japan, and the United States suggest that there is no single best solution to the challenge of reconciling and balancing local and regional needs and conditions with national goals. The federalized systems of environmental protection with the European Union, the United States, and Germany all operate on different models. The critical consideration for effective coordination among units in a federal system is that the sub-national administrative units that are responsible for the implementation of national law and policy have environmental protection as a very high priority.

The sub-national units are usually provided with the flexibility to adjust for regional variations, and in some instances with the ability to develop regulations more stringent than those promulgated nationally. An example of the latter can be found in the TF

case study of clean air policy in Los Angeles, where a critical factor in the success in cleaning the air was due to the ability of the State of California to impose clean air standards that exceed those established by the Environmental Protection Agency of the United States (see Mazmanian: ”Achieving Air Quality – The Los Angeles Experience,” Occasional Paper). The European Union operates on the basis of subsidiarity, meaning that environmental protection should occur at the lowest governmental level appropriate to the issue. Local environmental problems, thus, are the responsibility of local authorities. In contrast, environmental matters that are of transnational scope or impact typically are the responsibility of the European Union.

The European Union, through qualified majority voting, establishes EU-wide environmental regulations and directives that member states must then transcribe into domestic law. EU directives usually leave member states quite some freedom to adapt goals and requirements to their specific situation. As is the case with California in the United States, individual member states of the EU do have the authority to establish environmental regulations that are more stringent than those established by the EU commission in Brussels as long as it can be shown that this is being done for environmental reasons (and not simply to obtain competitive advantage).

Establishing the appropriate balance between national goals and local-regional goals and interests has required relinquishing of some regional autonomy in pursuit of national environmental goals, which has necessitated greater communication, the development of trust, and coordination among the national, regional and local levels of government. The improved inter-governmental relations has also helped in addressing cross-jurisdictional environmental problems at the sub-national level, such as managing at the watershed or air basin, or metropolitan level of a problem. In effect, in establishing a relatively few but connected levels of environmental agencies in Japan and the West, a balance has been struck that ensures a reasonably uniform implementation of national laws and regulations, provides for systematic performance evaluation based on national goals, while remaining fairly responsive to local needs and special circumstances. Moreover, the greater the integration and coordination among national and sub-national levels, the greater is the information sharing and policy learning possible throughout the entire system of environmental governance.

China, with its more than 2,500 different environmental units at the county, municipal, provincial, and state level, has encountered extraordinary problems in inter-unit coordination and cooperation. This stems in part from the varying local interests and

involved. It is the result of the unusual degree to which responsibility for environmental protection and enforcement has been devolved to the lowest levels of government in China. This problem in organization has been exacerbated by the far higher priority given to economic growth over environmental and resource protection until quite recently. The consequence, repeatedly cited in the scientific literature (see Literature and TF Occasional Papers, and Case Studies) and experienced by those responsible for environmental protection at the higher levels in China is that the sheer number of administrative units, their relatively weak capacity, their accountability primarily to the local government and appointed officials, and economic over environmental priorities has seriously undermined the goal of harmonious environmental-economic development.

Finally, many if not most EPBs lack the resources to develop the scientific, technical, and managerial capacity needed to effectively carry out their mission, especially in the rapidly growing and complex urban settings of China (see Hu, Zhang, Zhang & Qin:

“Urban Environmental Governance in China,” Case Study). The exception to the general pattern is the coordination and leadership found in a small number of major metropolitan centers, such as in Dalian, Nantong, Shanghai and Xiamen (OECD, op.cit.,p. 20), or in the plans for new eco-communities, such as Dongtan on the island of Chongming, and generally at the provincial level where the resources, capacity, and leadership in harmonious development exists. In these cases, the talents and resources have continued to grow and expand to better match the scale of their environmental problems.

There is no fixed or simple organizational solution to matching environmental agencies to the size and scale of the problems they confront, but it is clear that China represents an extreme mis-match with its thousands of local EPBs struggling to address problems that are often of a transboundary or regional nature. It is the judgment of the TF that this must be rectified if China is to successfully address its pollution and resource protection needs and meet its ambitious goals in the 11^th five-year plan. In considering various options, the TF believes that as a minimum, EPBs should be consolidated at the metropolitan level for all major urban centers throughout the nation. A second order of consolidation could occur at the provincial level. In addition, the funding for the provincial and metropolitan EPBs should be shared by the provinces, metro areas, and the central government. This is to ensure shared inter-governmental responsibility, coordination, and monitoring on the one hand, and fidelity to national environmental goals on the other. For these same

reasons, professional and managerial training for environmental management and the career development of those within these agencies should be a joint-responsibility, though primarily directed by SEPA.

The intent of this recommendation is to provide a corrective to the serious fragmentation of environmental policy units in China today, along the lines developed over decades of experimentation in the OECD nations as they moved into the more advanced stages of economic development and environmental harmonization.

Action item (2): Align the vast array of local EPBs around a three-tired system of national, provincial, and metropolitan (large urban) level environmental agencies, responsible to and reporting up through SEPA as the nation’s environment ministry.

c. Providing Multi-Sector Oversight Capacity within SEPA

The range and severity of China’s environmental problems has lead to the expectation that SEPA should and will enhance its regulatory reach across numerous industrial sectors, a growing number of large and small firms, and out to China’s many regions and communities. To accomplish this, however, will require the addition of scientific, technical, and managerial capacity. At the same time, and as a note of caution, the experience elsewhere has shown the perceived need for capacity can seem endless.

While the resources and capacity of national environmental ministries varies across the OECD countries, by almost any measure the resources and capacity of SEPA are insufficient. This is the case whether measured by the number of personnel relative to population size, by per capita expenditure, per regulated unit of industry or industrial unit per expenditure, or in relation to funding for development ministries.

Moreover, it has been the experience of national environmental agencies elsewhere, that even those with considerable internal capacity, in a number of important areas require additional specialized knowledge; in these cases, they have found it necessary to convene independent assessment and advisory bodies to the agency.

Examples include the regular establishment of study groups on specific environmental problems by governmental agencies in Japan; the creation of Enquete Commissions of the federal parliament in Germany, made up of politicians, scientists, industry representatives and NGOs that address specific environmental issues, and the regular contracting out of research questions to environmental think tanks and

universities in the United States. It is the recommendation of the Task Force that SEPA should be provided the authority and resources to convene such bodies.

Action item (3): Develop science and technology capacity within SEPA to assess and manage major environmental issues across major pollutants and industrial sectors. Provide SEPA with the authority to establish independent advisory commissions in particularly salient and complex issue areas.

d. Providing Resources commensurate with SEPA’s Responsibilities

It has been the experience elsewhere that when making the above recommended types of changes—such as streamlining through consolidating smaller governmental agencies, improving coordination across levels of government, enhancing data gathering, improving agency management, and establishing clear performance expectations—can produce budgetary savings. However, the savings are not always reflected in the central government’s budget allocation to the national environmental agency. The costs are usually captured by private sector actors seeking guidance, technical assistance, and permits from the agency, and the local governments that no longer are expected to totally fund and operate their own environmental agency.

The scope and scale of the environmental problems facing China are enormous. Yet, the personnel and resources provided to SEPA are relatively small compared with the country’s geographical size, population, and environmental problems. SEPA has only on the order of 2,200 employees (219 administrative staff in its Beijing headquarters and about 2000 staff working in various national offices and centers affiliated with SEPA). Even if SEPA moves forward with its plans to establish six regional offices and hire another 180 employees, the manpower of the administration is comparatively rather weak.

As points of comparison, the U.S. EPA employs 18,000 people in its Washington, D.C.

headquarters, 10 regional offices (located in Boston, New York, Philadelphia, Atlanta, Chicago, Dallas, Kansas City, Denver, San Francisco, and Seattle), and more than a dozen laboratories (including the National Risk Management Research Laboratory of the Air Pollution Prevention and Control Division in Research Triangle Park, North Carolina and the National Enforcement Investigations Center Laboratory in Denver, Colorado). The German Federal Environment Ministry (BMU) has 830 employees in its principle offices in Bonn and Berlin and another 1,880 in its three affiliated federal

agencies: the Federal Environment Agency (Umweltbundesamt), the Federal Agency for Nature Conservation (Bundesamt für Naturschutz), and the Federal Office for Radiation Protection (Bundesamt für Strahlenschutz). In addition, the 16 German Länder have their own environmental administrations as the German Basic Law gives the Länder primary responsibility related to policy implementation. The Japanese Environment Ministry employs over 1,100 staff in its Kasumigaseki headquarters and several hundred more in its affiliated research centers and institutes (such as the National Institute for Environmental Studies, which employs approximately 270 scientists). The Dutch Ministry of Housing, Spatial Planning and Environment is staffed with more than 1,000 environmental policy personnel for a country of only 16.5 million people.

Action item (4): Enhance the capacity of the environmental administrative system of China’s central government by increasing the budget and size of SEPA in order for it to adequately meet its responsibilities of analysis, monitoring, regulation, technical and professional training, and enforcement. Provide, through SEPA grants, for a significant portion of the costs of operating metropolitan and provincial level EPBs. Establish a grant program to fund innovative environmental management experiments by local governments.

Action item (5): Rationalize the internal management and organization of SEPA to enhance the development of integrated and comprehensive environmental policy tools. Establish an office responsible for policy integration reporting directly to the Minister and whose approval must be secured prior to any policy promulgation.

3.2 Adopt Best and Safe Practice in Business and Industry